Show the time line for a $400 cash outflow today, a $518 cash inflow in year 3, and a 9 percent interest rate.
Answer to relevant QuestionsWhat is the future value of $500 deposited for one year earning a 8 percent interest rate annually. A deposit of $750 earns interest rates of 9 percent in the first year and 12 percent in the second year. What would be the second year future value?Consider a $2,000 deposit earning 8 percent interest per year for five years. What is the future value, and how much total interest is earned on the original deposit vs. how much is interest earned on interest?What annual rate of return is earned on a $1,000 investment when it grows to $1,800 in six years? What annual rate of return is implied on a $2,500 loan taken next year when $3,500 must be repaid in year 4?
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